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Texas judge blocks Obama administration's new overtime rule from taking effect

Labor Secretary Thomas E. Perez. (Andrew Harnik / Associated Press)
Labor Secretary Thomas E. Perez. (Andrew Harnik / Associated Press)

A Texas judge blocked President Obama's bid to expand overtime pay protections to millions of Americans on Tuesday, thwarting a key presidential priority just days before it was set to take effect.

The Labor Department rule would have doubled the salary level at which hourly workers must be paid extra for overtime pay, from $23,660 to $47,476. Siding with business groups including the U.S. Chamber of Commerce, Texas District Judge Amos L. Mazzant III halted it.

The rule, finalized in May, represented the first such change in more than a decade and was hailed at the time as the most consequential action the Obama administration could take for middle-class workers without congressional involvement.

Plaintiffs had argued the Labor Department acted beyond its authority under the Fair Labor Standards Act. 

The administration said more than 4 million salaried workers stood to benefit from the change when it took effect Dec. 1.

The rule was already in jeopardy after the election of Donald Trump. Just as the Obama administration made the change through its rule-making prerogatives, a Republican administration could undo it.

Neither the White House nor the Labor Department had an immediate comment.

Republican lawmakers and their allies in the business community, which were behind the legal challenge, celebrated the decision.

"The decision brings us a step closer to curbing regulations that have resulted in $80 billion in compliance costs and more than 25 million hours of paperwork," said Linda Kelly, senior vice president for the National Assn. of Manufacturers. "The fights are not yet over — and our work is just beginning."

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